By Paula Pant
It’s not uncommon for sellers to search for a new home while simultaneously hosting open houses to encourage buyers to make an offer on their current home. But while common, being both a buyer and a seller is difficult enough, and even more so when you’re trying to time a sale with the purchase of a new home. If your current home sells quickly, you might feel rushed into your next home purchase if you want to avoid a move into short-term housing while you continue your search.
While the prospect of paying two mortgages for your current home for sale in San Diego, CA, and a new property across the country may send shivers up your spine, there are some definite advantages to buying a house before selling your current home. Plus, if you take advantage of the protections in place for sellers who are also looking for a new home, there is little risk in purchasing a new home before your current home sale is complete.
Here are some considerations to help determine when to buy a house before selling your current one.
- You enjoy knowing what’s ahead of you. If you’re the type of person who feels nervous leaping into the unknown, you may find you’re more emotionally equipped to part with your current home when you know you’ve got your next place lined up.
- You have time to hold out for what you want. You won’t feel rushed into settling for a home that’s less than perfect just so you have somewhere to live (or because your friends are getting sick of your crashing in their guest room). You’ll be able to wait for the perfect house, whether it’s in the perfect neighborhood, has a perfect layout, or is the perfect price (or all three!).
- You could still bring cash to the table. You may qualify for a bridge loan if your credit is good and you have enough equity in your current home. Bridge loans allow transitioning homeowners who haven’t yet sold their current home to access the money they need for a down payment on a new home.
- You save on extra moving costs and hassle. If you sell your home before you buy the next one, you may wind up moving twice – first to temporary housing and then to your new home. If you buy first, you’ll need to move only once. If your temporary residence is small, like a studio apartment or a guest room in a friend’s house, you’ll also face storage fees for all your furnishings in limbo.
- You have a safety net. Although it’s not as attractive to the sellers you’re buying from, an offer that’s contingent on the sale of your current home allows you to put your next house under contract while still giving yourself extra time to find a buyer for your current home. In theory, that’s the best of both worlds.
- Your next home is too good to pass up. You’ve found your dream home, and the seller is extremely motivated. If you love the home so much that you know you’ll regret letting this opportunity pass you by, then it could be worth taking a leap.
How do you decide when to buy a house? Have you bought a new home before selling your current home? Share your experience in the comments below!